Rabat - The General Confederation of Enterprises (CGEM) president, Salaheddine Mezouar, has pleaded for a fundamental reassessment of the tax system.
Rabat – The General Confederation of Enterprises (CGEM) president, Salaheddine Mezouar, has pleaded for a fundamental reassessment of the tax system.
“We ask for a fundamental reflection on taxation that can be a powerful lever for regulation, development, and economic equity,” said Mezouar. He was speaking at a meeting on Wednesday at CGEM headquarters where Minister of Economy and Finance Mohamed Benchaaboun presented an outline of the 2019 Finance Bill.
Mezouar said that he reached an agreement with Benchaaboun to establish a tax limit to exempt lower-income people from paying taxes in the first half of 2019. He noted that the meeting must define the outline of a reform to be included in a tax planning law.
Mezouar emphasized that businesses today need a “confidence shock”: neutrality of VAT, legal neutrality in tax treatment, and a taxation that does not impact both the restructuring of companies and the progressivity of corporate income tax (IS), which must be sustainable in order to enable small businesses to escape the precariousness of the informal economy.
He considered that the economy needs incentives to refresh investment. He also regretted that Morocco does not have a tax credit system to encourage research.
Mezouar referred to the government’s settlement of MAD 40 billion in VAT debt accumulated in recent years by private sector companies and state-owned enterprises, estimating it will enable “further investments.”Mezouar commended the finance bill’s decreasing the corporate tax rate from 20 percent to 17.5 percent for companies that make a profit between MAD 300,001 and MAD 1,000,000.
On the other hand, Benchaaboun insisted on the necessity of giving back confidence to investors and accelerating fiscal reforms.
Benchaaboun assured that the government plans to enhance private investment by enacting legislative, organizational, and institutional reforms to improve the business environment.
He pointed out that constraints, particularly related to the global rise in oil and gas prices and urgent social projects, will have a direct impact on the financial equilibrium, requiring management to reduce spending and mitigate the burden on the investment budget.